BIR Ruling [DA-074-02]

April 24, 2002 BIR RULING [DA-074-02] Atty. Hubert E. Molina District No. 3, San Manuel Isabela S i r : This refers to your letter dated 16 April 2002 requesting as representative of the heirs of the late Federico M. Molina for an extension of two (2) years within which to pay the estate tax liability of the estate of the said decedent pursuant to Section 91 (B) of the Tax Code of 1997. It is represented that Federico M. Molina died on September 21, 2001; that because of the prolonged hospitalization of the decedent prior to his demise, the family incurred a huge amount on hospital bills not to mention the expenses incurred in laying to rest his body; that 3 months after the burial or on December 27, 2001, the surviving spouse of the decedent, Marcelina Molina suffered a severe heart ailment that required a heart bypass operation at Philippine Heart Center (PHC); that prior to her operation at PHC, she was confined at Callang General Hospital in Santiago City where she was confined for 7 days then was rushed to St. Lukes Hospital for a more extensive examination of her actual health condition where she was confined for 4 days; that the family incurred a substantial amount for the said confinement and dreaded heart bypass operation that resulted in heavy debts; that the expenses of the family did not end there because of the need to purchase expensive medicines for the recovery and as maintenance of Marcelina Molina which should be taken thrice daily; that the heirs of the decedent are settling the estate extra-judicially; that the estate tax which is estimated to be not less than P50,000.00 is due on 19 April 2002; that, in light of the foregoing financial difficulty of the family, an additional expenses such as the said estate tax is just too much to bear at the present, thus, in the interest of justice and fairness, you invoke the provision of Section 91(B) of the Tax Code and vividly ask to be granted an extension of 2 years from April 19, 2002 within which to pay the estate tax liability of the estate of the late Federico Molina. In reply thereto, please be informed that Section 91(B) of the Tax Code of 1997 provides that "When the Commissioner finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardship upon the estate or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2) years in case the estate is settled extra-judicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of this Code shall be suspended for the period of any such extension." In view of the aforementioned valid and justifiable ground, your request for an extension of two (2) years reckoned from April 19, 2002 to pay the estate tax due on the estate of the late Federico M. Molina, is hereby granted, pursuant to Section 91(B) of the Tax Code of 1997. Very truly yours, (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service